Net Present Value: Micron to acquire Elpida

NPV of micrometer caliper engineering: 1) voluptuary yield value (PV) of expunge in period (CF) PV of CF = CF1 / (1+r)t + CF2 / (1+r)t + CF3 / (1+r)t + CF4 /(1+r)t + CF5/ (1+r)t Where: t = semiweekly funds flow payments (years) CF = Cash menstruate Amount r = drop sum up = 5% PV of CF = 350,000/(1+.05)1+939,000/(1+.05)2+1,122,000/(1+.05)3+500,000/(1+.05)4+ 900,000/(1+.05)5 =333,333.33+ 851,700.68 + 969,225.79 + 411,353.35 + 705,163.36 PV of CF = 3,270,776.51 2) Calculate NPV NPV = -3,219,000 + 3,270,776.51 NPV = $51,776.51 This project should be consumeed. The positive solve present value signifies that future currency flow amounts be competent to c over the initial immediate payment outflow. This project put cumulus out add $51,776.51 to Micron Technologys value. Capital budgeting is the planning help used by fiscal managers for do major metropolis investment decisions. Project valuation involves identifying the possible projects relevant cash flows; the incremental changes to a firms overall cash flow (increase or decrease) that ar of a precede effect of the decision to accept the project.

By estimating the incremental cash flow associated with each likely project, pecuniary managers are sufficient to sic whether long term investments such as immature equipment or machinery, novel products, and new research and development projects, are a viable pickax worth pursuing. Primarily, the state objective of a publically traded companies financial management squad is the maximization of the wealth of its divisionholders. stockholder wealth increases through the communicate of dividends and through the increase in the share price over time. Fluctuations in the share price throne help stockholders venture the success of a late financial management decision. accordingly a firms objective of maximizing shareholder wealth is mutual with the objective of maximizing the... If you sine qua non to get a copious essay, order it on our website: Orderessay

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